Aldi eyes major expansion to challenge 'big four'

Discount supermarket Aldi has unveiled a major £1.3 billion expansion plan to challenge the ‘big four’ as it marks 30 years in the UK.

Monday, 28th September 2020, 12:29 pm
Aldi has launched a major expansion plan.
Aldi has launched a major expansion plan.

The budget brand said it plans to open 100 new stores over the coming year, creating 4,000 jobs, as it claimed that one million British shoppers have switched to shopping at Aldi.

The firm last week launched its biggest challenge to the four major UK industry players - Tesco, Sainsbury, Asda and Morrisons - when it rolled out a new click and collect service to customers in a pilot region, in its first foray into online grocery shopping.

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In May, Aldi revealed plans to deliver groceries to homes in the UK for the first time through a partnership with Deliveroo.

It refused to comment on when the click and collect service will be available in Scottish stores.

In a report to the City today, Aldi said it will drive investment into creating and upgrading stores, distribution centres and innovation across its operations.

The firm reported that sales increased by 8 per cent to £12.28 billion in 2019, while it saw pre-tax profits jump by 49 per cent to £271.5 million for the year.

Aldi’s UK chief executive Giles Hurley, said: “For over 30 years, our success has been driven by the ever-increasing number of shoppers who put their trust in Aldi every time they shop with us. This is what enables us to keep investing in Britain – in our products, our prices, our people and in the communities we serve.

“With the UK’s economic outlook increasingly uncertain, families are more concerned about their grocery bills than ever. We’ve seen before that our customers need us most in times of financial hardship, which is why our commitment to remain Britain’s lowest-priced supermarket is more important than ever.”

The company said its expansion plans were in line with its long-term target of 1,200 stores by 2025, alongside over 100 store upgrades under its Project Fresh initiative.

Major grocery rivals, including Tesco and Morrisons, have pushed their prices lower in recent months in a bid to stem strong growth by Aldi and fellow German discounter Lidl.

However, both Aldi and Lidl have failed to benefit substantially from the surge in demand for online orders and home deliveries since the pandemic fully impacted the UK.

However, Aldi claimed its prices remain "20 per cent lower" than the UK grocery market and pledged to keep them at the “lowest in the market”.

"If our competitors drop their prices then we will simply drop them lower," Mr Hurley said.

He added: “The response to the challenge presented by the Covid-19 pandemic was both heroic and historic.

“As ever, our 36,000 colleagues and thousands of suppliers rose to the challenge of feeding the nation with tremendous skill and courage, whilst the British public displayed remarkable patience and compassion. If there is a positive to take from the situation, it’s that supermarkets, suppliers and shoppers can overcome the greatest of challenges when we work together.”

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